Chasing passive candidates typically only fills 11% of roles. This leaves a glaring 89% of roles open, which could be filled by former employees.
.png)
The recruitment industry is gaining complexity with the abundance of tools and platforms to source, track, qualify and engage with prospective candidates. Many of these focus on hiring people with no previous link to the organization, in order to fill positions that they qualify for on paper. But how successful is this sourcing and recruitment strategy overall?
In industry terms, this process is referred to as “stranger hires”. As much as this might make sense in terms of sourcing from a wide pool of talent, this process of selecting people with the right qualifications from mostly online sources doesn’t often contribute to long term hiring success or return on investment.
In this article, with reference to the associated 2020 Alumni Research Report, we’ll elaborate on the statements above and discuss how building a relationship with alumni can help to engender company loyalty, and in turn, increase your ROI by up to six times!
Finding a suitable employee who is qualified to fit the open role is a lengthy and tedious process. There could be hundreds of applicants to sort through and interview before finding a good candidate to hire.
Not only is talent acquisition about finding the person with the right qualifications, but it also involves finding a candidate who can assimilate quickly and effectively into the company culture. The longer an employee takes to settle in, the less productive they are initially, and the more they end up costing the business before they are fully up to speed.
Unfortunately, if a hire is unsuccessful, this will cost the business even more, as it is difficult to recoup the costs and efforts that were ultimately wasted in helping a new employee settle in.
To quantify this, there is a recent statistic that states that a company can fill up to 20% of open positions with an alumni program. Therefore, it makes sense that a Human Resources department can shorten the recruitment process considerably by engaging with and hiring former employees who already know the ins and outs of the company.
Time-to-fill is calculated by counting the number of days it takes for a new hire to accept a position after a job listing is posted.
The fact that this is being measured shows how critical it is for companies to not waste any time by taking too long to hire someone. A position left open means less productivity and revenue for the business. However, while a new hire may have all the right qualifications, there will still be obstacles in place. Things like building relationships, finding out how things work and undergoing onboarding can delay the initial time-to-fill process.
Therefore, considering the fact that as little as 2% of internet recruits convert into employees, it makes sense to make use of an alumni network to find the right candidates for a given role.
As we discussed above, the first critical metric when it comes to hiring a new employee is time-to-fill, after which comes time-to-productivity. This particular metric is calculated by quantifying the time it takes for a new employee to actively participate in their role and contribute to an organization.
The importance of this metric cannot be overstated, as the longer it takes for a candidate to start fulfilling the requirements of the role, the more time and investment is wasted. This, of course, could be avoided by hiring someone already familiar with the business’ culture and processes.
To further emphasize the benefits of this approach, statistics state that stranger hires are only the 6th most effective way to make a quality hire, and hiring an alumni leads to a 50% reduction in time-to-productivity.
In this case, a quality hire refers to the percentage of hires who reach their one-year anniversary and who has met expectations at their first performance review.
As we have discussed above, finding the right candidate out of a group of passive, unconnected candidates is a gamble, and 50% of stranger hires end up being a mistake. Unfortunately, while mistakes do happen, at scale this can have disastrous consequences for productivity and the business overall.
In fact, to emphasize the statistics further, chasing passive candidates typically only fills 11% of roles. This leaves a glaring 89% of roles open, which could be filled by former employees. They are referred to as boomerangs because they have returned to the same company.
While some companies may not have been as open to sourcing talent from an alumni network before, statistics show that boomerangs typically have a 44% higher retention rate over 3 years. This means that over 3 years there would have been a lot less time and investment wasted on training new hires that would not contribute to the company’s success in the long term.
Following on from the point above, hiring from a pool of corporate alumni doesn’t just make sense from an anecdotal or company culture point of view. Rated as the number one source of quality hires, alumni engagement also makes sense from a mathematical perspective. This is because if we examine the infographic above, we can see that with all the statistics and projected costs considered, a company of 10,000 could ensure an ROI of $1M when rehiring 238 employees for open positions.
Therefore, hiring from a talent pool of former employees doesn’t just save time and effort when it comes to time-to-fill, time-to-productivity, and onboarding, but it also leads to a higher return on investment.
If we consider that an alumni network also contributes to a company’s brand and sales, there is even more reason to consider this approach.
According to statistics, 72% of former employees would happily return to a former employer. This means that it is likely that former employees would contribute positively to an existing work culture, which is an important part of the overall employee experience. 33% of HR professionals and 38% of managers agree that already being familiar with the organization’s culture, and having fewer training needs, are the biggest benefits to hiring back former employees.
If we take a look at current trends, this approach also resonates, as statistics state that 73% of millennials are willing to engage in contract work, and employee tenure is now down to only 4.2 years. This means that instead of devoting time and effort to engaging with passive candidates, you can harness talent for more concentrated periods of time, for greater return on investment.
In this way, sourcing from an alumni network can also look different for different roles. It doesn’t mean that they need to take on permanent roles to make a positive contribution, which is the epitome of engendering company loyalty over the long term.
As we’ve discussed in the article above, using an alumni network and choosing to hire former employees over strangers can have a significant impact on the success of your company. With reference to recruiting metrics and a variety of statistics, it is clear that hiring within an existing talent pool makes a lot more sense than investing time and effort into engaging with passive candidates who might never provide value for your organization.
While recruitment may currently be convoluted with a number of platforms and systems, it is clear that there is a more comprehensive way to build a pool of talent as well as a community.
Therefore, if you are looking for a way to bypass the complexities of Human Resource Management, it makes sense to engage with former employees through an effective platform that can provide long term value and help you drive a 6x ROI on your recruitment program.
To sum it up, using an alumni network to fill open positions in your company has many benefits and can help to maximize your return on investment. If a company chooses to engage with corporate alumni, statistics show that there is a very good chance that more positions can be filled in a shorter time, and have a higher long term success rate.
Get in touch with us to find out more about how Enterprise Alumni’s platform enables organizations to access a qualified pool of former employees ready to return, thereby reducing Time to Fill, increasing Time to Productivity and delivering a 6x boost to an organization’s recruiting ROI.
